The Invisible Pillars of Deep Tech Startups: Mentors

Mentors have a major role to play in helping tech start-up founders at different stages of their long and lonely journey

-by Ramakrishnan N

In all the hype and hyperbole surrounding entrepreneurship and entrepreneurs, the role of one crucial group of people is often not talked about, especially when it comes to deep tech and science-based inventive start-ups – Mentors! Most often, they are the anonymous people who lend a shoulder, act as a sounding board, offer advice from years of experience, guide the founders, provide industry connects and give them early warning about the pitfalls in the market or the strategy being adopted.

They may at times invest in the start-ups they mentor, but are often in the background letting the founder or the founders take decisions based on advice and inputs. They do not involve themselves in day-to-day activities of the start-up but are just a call away for the founders.

Mentors can broadly be classified into two categories – general purpose mentors and those with technical expertise. A deep tech start-up will need the help of both these types of mentors at different stages of its journey. While in the initial years, it will depend a lot more on general purpose mentors who will help the start-up in various ways, in the later stages, as it goes through different technology readiness levels (TRL) and the idea gets transformed into a prototype and then a product, the sector experts will play a bigger role. From science to product to field testing to go-to-market, at every stage, they will need domain specific mentoring.

Filling critical gaps

“Mentoring,” says Rajan Srikanth , an angel investor and mentor, “is nothing more than a scaffolding for the construction of the entrepreneur and the enterprise. You can build without it, but you will have cases where it will fall apart or it will be a lot more tedious to do it without the scaffolding. With the scaffolding, you can come up faster. But you have to have the right kind of scaffolding.”

Typically, in India, deep tech founders are those who have started their ventures right out of college or are scientists who are translating their research into a commercial enterprise. They do not have the requisite experience of running a business, growing it, building a product and taking it to market. There are critical gaps in knowledge, experience and industry connects, which the mentors help bridge, especially since the start-ups will not be in a position to hire the required expertise to the team and pay them hefty salaries.

Even in a country such as the US, where the ecosystem for deep tech start-ups is much more evolved and mature than in India, the ventures take a long time to get to market. In India, it will take even longer as they meander and sub-optimise. General purpose mentors may help them with advice, strategic inputs and, at times, money, yet domain specific insight is still needed. The pool of mentors with domain expertise and knowledge is small, which is where technology business incubators and incubators attached to institutions such as the IITs and IISc step in and try to fill the gap.

Deciding in uncertain times

Most of us are not trained to take decisions when there is a high degree of uncertainty, says Dr. Satya Prakash Dash , Founding and Former Head of Strategy, BIRAC, and a mentor to deep tech start-ups. Entrepreneurs face high uncertainty almost daily. Entrepreneurship is so fast-paced that nobody has the time to wait for all the data to come before they can take a decision. Any leader worth his or her salt does not wait for every little bit of information to come to take a decision. They take a decision when there are still gaps in the information and when there is still uncertainty. That ability of taking decisions in an uncertain environment is a learned behaviour. That learned behaviour comes from advice and is guided by people who have experience, says Dash.

Where do mentors really help start-ups? One is to have frank discussions. Very often, founders hesitate to have frank discussions with their board members or investors when they are confronted with challenges. Which is why they need mentors who are not investors so that frank discussions become possible, says Srikant Sastri , Chairman, Geospatial Data Promotion & Development Committee, Government of India, a serial entrepreneur and a mentor.

Technology development and de-risking

Dr. Premnath Venugopalan , Director, Venture Center, points out that there is a difference between mentoring for deep tech ventures and mentoring for other businesses. The very first stage of deep tech enterprises is technology development and de-risking. If that does not happen, the rest will not progress. The first level of de-risking in a start-up relates to technology, which means one has to understand something about the technology to gauge whether it is sound, what will be the next steps, what are the barriers expected, where does the field stand today, what could be the opportunities for intellectual property.

“Some amount of technical depth in the early stage of mentoring helps gauge the soundness of the technology which is being proposed as a solution to the problem,” he says. Technical expertise is required at the problem definition stage itself. At this stage, it has to be understood whether it is a genuine problem that is being attempted to be solved with technology, what is the current understanding in science and what are the alternatives available to a given user. Both these require in - depth understanding and a mentor has to go deep enough to ask the right questions.

Most deep tech start-ups, he adds, are based on technology foresight – it is foresight about what is going to happen in terms of solution. As an example, Premnath points to the mRNA vaccines that were widely used during the Covid pandemic. Moderna and BioNTech, two companies that specialise in mRNA vaccines, were founded in 2010 and 2008. If their founders had sought advice from mentors without a scientific background, it would have been challenging for them to even visualize the potential of mRNA technology in transforming therapeutics.

“There is foresight, there is a problem and there is a solution. All three require technical insights,” he adds.

Providing network connects

One of the important tasks of mentoring is networks. Mentors provide the industry connects and referrals for the founders to tap into. In deep tech, according to Premnath, one of the networks that is relevant is the scientific community at large, which often is a global community. “You need to play the game globally and the mentor networks you need to build are global,” he says. In mentoring activities, it is not that the founders will be dependent on just one mentor. It is always a group of mentors, each one with different expertise and insight. Early-stage mentors need to identify at what stage they need to bring in the late-stage mentors and work on it.

According to Premnath, it is important to have mentors all through, but they change over a period of time. The nature of mentoring changes considerably as the ventures grow because the issues they grapple with become different. In the very beginning, when a technology business incubator such as Venture Center is involved, the founders are just learning the ropes about business, pitching, how to put their story together and narrate it, for which the in-house mentors will be helpful. There are a set of tools and templates that can be tried out and the incubator may also conduct lectures. When the founder is getting ready to pitch to investors, all the mentors will contribute some time. At a later stage, when the venture is trying to close a deal with a corporate or an investor, the kind of inputs needed are at times judgemental. Should you or should you not enter the deal, how do you evaluate it, what are the pros and cons. This calls for a different kind of mentoring expertise.

Looking ahead

The primary role of mentors, according to Sanjay Kanvinde , Co-founder, Lavni Ventures and a mentor, is to help the founders plan for the next three-six months and set the momentum for the venture. A lot of deep tech companies are started by founders with a technical background. Their core skill is the technology or the research they have done in the laboratory. Their skills do not include how to narrate their story and how to get listeners or investors excited. They may lose sight of the big picture. “Story-telling and the ability to get a broader set of stakeholders excited to join your journey are important. To look at risks, how to allocate capital to minimise the risks along the journey, these are all areas where mentors add a lot of value,” says Kanvinde.

Guide, but don’t control

An important attribute for a mentor is the ability to ask the right question at the right time and as much as possible, let the founder come up with the answers. “A mentor can give the answer, but a great mentor never does. It is almost like a sounding board. Although the mentor knows the answer, it is far more powerful if the founder goes through the thought process and comes up with the same answer that the mentor wants,” says Kanvinde. This builds the decision-making muscle. The founder will then be capable of how to decide on an issue, how to approach the problem, what are the factors that need to be considered and what weight should she or he attribute to each factor. A good mentor, points out Kanvinde, will subtly let the founder arrive at the answer and, in the process, the founder builds the skill to arrive at answers.

The upfront commitment of a mentor is important. Mentors have to be available intellectually and emotionally. What is the practice that a mentor can bring? Listening well is the key. Also, if a mentor does not know something, it is better to say so and then say he or she knows someone who will be able to help.

“The idea for a mentor is to guide them, not control them,” says Kanvinde. The best mentoring relationships, according to him, evolve through a two-way peer-to-peer equal relationship. For a mentor, being optimistic and adopting an optimistic frame of reference are important. The second mindset that a mentor should have is to challenge, but not be destructive. The third is to be empathetic and available any time the founder wants him or her.

The mentor, according to Dash, has to be invested in the founder’s idea. It is up to the founders to decide what kind of mentoring they want and for how long. Mentors also have to grow. A lot of mentors do not understand that the founders are also maturing and growing up. One key issue mentors have to keep in mind is that they should not talk down to the founder. A founder will definitely need a mentor who will provide a safe space to discuss issues that they want to. It does not matter what a mentor’s qualification is as long as there is wisdom available which the mentor is willing to share.

The only things that matter are empathy and compassion. He favours free and frank discussion between the mentor and the mentee, even suggesting that they put everything down in writing and drawing up an agreement.

Sastri says a mentor cannot and should not micro-manage or get emotional when their advice is not accepted. The mentor has to realise that the final decision always rests with the founder, who will listen to various points of views from different mentors and their own team members before deciding the best course of action.

According to him, a mentor is not just a shoulder for the founders to cry on. “Then, the founder will come to you when it is too late or if they are in trouble, whereas the greater value would be in saying, you are heading for trouble and this is what you should do to avoid that trouble,” he says. If someone is committing to mentor on an on-going basis, then he or she is committing to add value, which means that they should discuss any issue that is important to the success of the start-up.

What do mentors get out of mentoring

Most of them get into mentoring because they want to give back – either to their alma mater or to the larger society. They feel they have knowledge and expertise that they must share with the next generation, particularly the founders. Some of them may even invest in the start-ups they are mentoring, as an angel investor. A few may settle for equity in return for the time they spend on mentoring. “What mentors get out of mentoring varies from person to person,” says Srikanth. The best case is, a mentor must have skin in the game. Putting money for some is an important signal that they show commitment, he adds. It is not so much that mentors want to make money by investing in the start-up they are mentoring, a mentor having skin in the game is critical to align the objectives.

According to Premnath, different people have different motivations. A lot of mentors do it pro bono, where some of the senior mentors are not merely interested in the money. They just want to do it because they want to help.

At MIT in the US, there is something called a Venture Mentoring Service. It is a free service for students who come up with business ideas. Some of the mentors are alumni and they want to engage with the institute, some others want to stay in touch with the latest developments in science and technology and new business ideas. For some others, mentoring provides a pipeline for their angel investment activity.

“For me,” says Kanvinde, “it is just the joy of giving back. I see this as a way to create wealth in the country through founders.”

Investing in the start-ups

Should mentors hold equity in the start-ups they are mentoring? It depends on individual mentors and the founders they mentor. There is a lot of chemistry involved in the mentor-mentee relationship, trust has to be built and there should be mutual respect. If you start on a note of transaction, then it becomes a consulting relationship, it is not a mentoring relationship. Also, equity has to be carefully dealt it. If a founder parts with equity too early too soon, it may create problems in fund raising later.

It will also complicate matters over a period of time. “One has to have the best interests of the start-up in mind,” says Premnath. On occasions, the mentors may become angel investors. “The way I look at equity,” he says, “is not as compensation but aligning interests. That means every party has to have aligned interests of success of the start-up, because in the short-term nobody will make money.”

Sastri also believes that if it is a long-term mentoring relationship then it is fine if both the mentor and the founder decide on a small equity arrangement. Kanvinde says he does not take equity or accept board positions in the start-ups he mentors, but he has invested in the ventures. “That has been a purely commercial arrangement. I have mentored a few companies. I have a fund and people have come to me and said, ‘can you invest in my start-up’. That does have an advantage in the sense I know the founder. The risk and the uncertainty in the capability of the founder are reduced when I make that investment,” he adds.

Founder’s perspective

How do founders view mentors? When Parul Ganju , Co-founder and CEO, Ahammune Biosciences Pvt. Ltd., a drug discovery start-up, was setting up her venture she says Dr. M.K. Bhan, former DBT Secretary, who was her mentor, played a key role in setting up their scientific programmes. He established clear and actionable go/no-go criteria in the early discovery phase. “As part of our decision-making framework, these criteria were critical in evaluating whether a potential drug candidate should move forward to the next phase of development of if we needed to reassess our approach. He always stressed upon the importance of ensuring that potential risks were thoroughly evaluated at an early stage to avoid failure later. We have been following this approach for all our programmes,” says Ganju.